Michigan already has the highest unemployment rate in the nation, and with the state income tax going from 3.9% to 4.3% and an expansion of the sales tax, it’s now only going to get worse. From Fox News:
The state Legislature agreed early Monday to raise the income tax and expand the sales tax to services in a historic deal with the governor that quickly ended a partial state government shutdown.
For just over four hours early Monday, fewer state police were on Michigan highways, campgrounds were closed, road construction projects and lottery sales were stopped, and more service interruptions were on the horizon for later in the day until the final pieces were sent to Democratic Gov. Jennifer Granholm.
The reason Michigan has such a terrible budget shortfall is that its taxes are already so ungodly high that people and businesses are moving out of the state, which is costing the state revenue. But the state legislature is too stupid to understand this and continues to raise taxes in an effort to raise more revenue.
This is how the crucial votes came down:
Some of the toughest votes were for tax increases, especially in the Republican-led Senate.
The Senate split 19-19 twice, forcing Lt. Gov. John Cherry to cast the tie-breaking vote in favor of the income tax bill and expanded sales tax to cover some services.
Four Republican senators voted for the higher income tax — Patricia Birkholz of Saugatuck, Tom George of Portage, Ron Jelinek of Three Oaks and Gerald Van Woerkom of Norton Shores. Democrats Glenn Anderson of Westland and Dennis Olshove of Warren voted against the income tax increase.
Three Republicans senators — Jelinek, Valde Garcia of Howell and Wayne Kuipers of Holland — voted to expand the sales tax to services. Anderson was the lone Democrat opposing the sales tax expansion.
The House passed the income tax measure 57-52. Democrats hold a 58-52 edge in the House, but three Democrats — Martin Griffin and Michael Simpson of the Jackson area and Lisa Wojno of Warren — voted against it. Two Republicans, Chris Ward of Brighton and Ed Gaffney of Grosse Pointe Farms, voted in favor of the proposal.
No House Republicans voted for the bill placing the 6 percent sales tax on services — a proposal stiffly opposed by the business community. All Democrats did, except for Reps. Marc Corriveau of Northville and Kate Ebli of Monroe, who voted no.
This makes Jeff Daniels’ ad touting Michigan’s pro business environment more of a joke than ever. National Review’s David Freddoso points out some alarming statistics:
Michigan has now lost net jobs two years in a row. Its unemployment rate is a staggering 7.2 percent, the highest in the nation (only Mississippi comes close with 6.7 percent). Between June and July, the state lost 20,000 jobs. It has lost 70,000 since July of last year. Michigan also ranks third in home foreclosures, with almost 14,000 new filings in July.
Between state and local property taxes, sales taxes, income taxes, and business taxes, the state of Michigan siphons off 11.2 percent of its state’s economy — above the national average, according to the Tax Foundation. With few jobs and high taxes, it’s hardly surprising that Michigan’s population declined last year — not just in proportion to the other states, but an actual decrease of 5,000. Meanwhile, the state has been buying nationwide ads daily on CNBC, in which actor Jeff Daniels urges entrepreneurs to move their businesses to Michigan. Another version of the same ad runs on local stations, urging business owners to stay in Michigan
It’s a pretty sad state of affairs.
